Defaults and terminations (ending contract by park manager)
There are a few reasons why a park manager may need to terminate a lease contract. Whatever the reason, park managers must follow certain processes , the tips below should help.
What if the tenant doesn’t pay their rent?
If a tenant falls behind in their rent it can addressed in two ways:
- A default notice issued to the tenant giving 14 days to pay the outstanding rent. If they don’t pay within that time park managers have seven days to issue the tenant with a notice of termination. If the matter is not resolved and the notice of termination expires, park managers have 30 days to make an application to the State Administative Tribunal (SAT) for a termination and eviction order.
- If the notice of termination has been issued and the tenant has not paid the rent within seven days. The park can apply to the SAT for a termination order. If the tenant pays the rent and the cost of the filing fee 24 hours (or more) before the SAT hearing date, you must withdraw your application.
What if the tenant pays the rent, but breaches the agreement in another way?
Park managers can issue a default notice if a tenant breaches their tenancy agreement. The default notice must include:
- a description of the breach;
- identification of the location of the premises/site;
- the day the breach occurred;
- the date the problem is expected to be resolved (giving at least 14 days notice);
- a clear indication of the expectation the problem is to be addressed and rectified otherwise you intend to terminate their agreement; and
- ensure the agreement is signed and dated.
If the breach isn’t resolved, a park manager can then issue a notice of termination, stating the grounds for the termination and indicating when they expect the tenant to leave the park (this must be at least seven days after they receive your notice). If they remain in the park after this date you can apply to the SAT for an order terminating their tenancy.
What if there is no breach but the park manager still want the tenant to leave?
If the tenant has a periodic agreement a park manager can terminate their agreement without giving a reason, by simply giving them at least 60 days notice for on-site premises and 180 days if it’s a site-only agreement.
Remember, if the agreement is fixed term it can’t be terminated without grounds before the contract expires.
What if the park has been sold and tenants need to move out?
If the park is sold and the new owners have asked for ‘vacant possession’ park managers must give tenants on periodic agreements at least 60 days’ notice for anyone with an on on-site agreement, and 180 days for those with a site-only agreement.
If the agreement with the tenants are fixed term, these agreements can’t be terminated without grounds before the contract expires. However, an offer of compensation can be made to tenants.
What if the premises become uninhabitable?
If the park is compulsorily acquired, or for some other reason it can’t legally be inhabited, this is called ‘frustration’ and you must give your residents at least 7 days notice to vacate the premises, and this must also occur at least 2 days before you personally leave the property.
What if your tenant leaves abandoned goods?
Park managers may find a long-stay tenant has left some of their possessions behind after a tenancy agreement has ended and may not be sure what to do with them.
Before any action can be taken, park managers must be certain the goods have been abandoned. The tenant may intend to return at a later date to reclaim their goods or they may not have abandoned the property at all but instead, have gone on holiday or been taken to hospital!
To establish the tenancy agreement has terminated, park managers can apply to the SAT for a declaration the tenant has abandoned the premises. Once park managers have a SAT order, they can apply to the Commissioner for Consumer Protection for a declaration there are reasonable grounds to believe any goods remaining have been abandoned.
Following the Commissioner’s process, park managers can then dispose of perishable goods or goods with a value less than the estimated cost to remove, store and sell them. Goods that do not fit this description must be stored for a minimum of 60 days before disposal of them after issuing the legally required notices.
Park managers will also have to apply to the SAT and the Commissioner if the tenant left behind their caravan and/or park home, which cannot be moved from the site.
What if a park falls on hard times?
Park managers must apply to the SAT and prove undue hardship if tenants keep residing in the park.
Can tenants seek compensation if their agreement is terminated?
Tenants on a fixed term agreement can seek compensation from the park manager if they have:
- terminated their agreement without grounds;
- sold the park and placed the tenant at a disadvantage;
- caused frustration; or
- fallen on hard times, asked them to leave and this has unduly disadvantaged them.
The extent of the compensation depends on what park managers can negotiate with the tenants. Or failing this, what the SAT decides is reasonable compensation in the circumstances.
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